The Indian rupee posted its biggest quarterly gain since the September quarter of 2012, streaking past the 60/$ level on Friday, to touch an eight-month high as foreign investors grabbed Indian shares anticipating a conducive electoral outcome.

The rupee ended Friday’s session and the financial year at 59.89/90 to the dollar, a smart 15% up from the all-time low of 68.85/$ that it hit in late August last year. In intra-day trade, the currency hit a high of 59.6850, the strongest levels since July 30. The rupee has gained 3.2% since December 31. Combined foreign flows into the bond and equity markets are in the region of $9.3 billion.

While exporters would be disappointed since they would earn less in rupee terms, oil marketing companies (OMCs) will be big gainers as will be corporates importing coal or machinery.

Companies with unhedged foreign exchange exposures also stand to benefit since they will mark these to market at a higher rupee value. The currency is expected to rise further to 57-58/$ if foreign flows into the bond and equity markets sustain, but give up some ground thereafter. Market players observe that chances that the pro-business opposition BJP would win a strong mandate at the general elections is prompting foreign funds to invest in India. Several exit polls have also predicted a strong win for a BJP-led coalition.

The optimism surrounding elections comes on the back of improving macroeconomic data and a general improvement in global sentiment as well.

“If we see an inflow of around $5 billion in the next month, the rupee could rise to 58 or 57/$,” said Manoj Rane, managing director and head of global markets at BNP Paribas. Rane, however, added that in the medium term, the rupee is likely to settle in the 60-63/$ range once the euphoria over elections tapers.

Dollar inflows into equities that were tepid at the beginning of 2014 have now gathered steam with foreign investors pumping in nearly $3.2 billion in March.

According to Hitendra Dave, head of global markets at HSBC Bank, the currency’s appreciation is likely to sustain for a longer time as dollar flows are also coming on the back of an improved current account deficit and not simply because of optimism surrounding the elections.